Every now and again, the topic of school leavers comes up.
The government has recently suggested that they would like to increase the number of technical colleges and apprenticeships. This is a good thing, and it echoes work we were doing in the last government to develop more practical skills. Indeed, we recently announced more in this area, promising to double apprenticeship funding to £2.73 billion by the end of our first parliament back in government.
But we also announced that we will end so called debt-trap degrees.
Tony Blair, when prime minister, introduced a target of 50% of all school leavers going to university, funded by a system of payment by students (through loans) and subsidies from the government. That has been the model ever since, although fees were increased by the Liberal Democrats in the coalition years from £3,500 to £9,000.
But it’s never really worked.
If a degree has economic value, the graduate will earn a decent wage and repay the loan over a reasonable period. But if it has no economic value, the graduate may never achieve a wage that meets the repayment threshold, so the loan gets written off. Or put it another way, you as the taxpayer picks up the tab for useless degrees.
Last week, we announced that we would scrap these useless degrees. Universities have, in part, evolved from academic institutions to vendors of courses, irrespective of their value and use.
In any practical sense, if a university wants to deliver a course that has no economic value, then it should be up to it to find fee paying learners. But it should not be up to the tax payer to underwrite this stuff.
Importantly, it should be up to the government to spend your money wisely on training skills that are of use – and that ranges from post graduate degrees all the way to apprenticeships and manual skills. And those skill should be taught in the right place and the right way.
That still leaves another uncertainty for students, though.
The government has crossed a long-held convention on not charging tax on human rights, in this case VAT on education. Now that Rubicon has been passed, there is little reason why the chancellor, in her budget coming up next month, cannot levy VAT on university fees. She would be bonkers to do it, but we all thought she would never tax employement until she did.
